Cyprus Investment Firm
PROCEDURE: For CySEC to grant CIF authorisation, according to Law 144 (I)/2007 (the Law which provides for the Investment of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other Related Matters), a formal application procedure needs to be followed, and certain requirements must be met, the most important of which are stated below.
The minimum capital requirement for a CIF depends on the type of services offered:
- A CIF that holds clients’ money, and/or clients’ financial instruments, and provides one or more of the following investment services:
- The reception and transmission of orders in relation to financial instruments;
- The execution of orders on behalf of clients;
- Portfolio management;
- Provision of investment advice;
must have an initial capital of at least €200.000.
2. A CIF that provides the investment services stated in subsection (i) and (iv) above, and does not hold clients’ money and/or clients’ financial instruments, and as a result may not at any time place themselves in debt to their clients, may have an initial capital of €80.000, or at least €40.000, and professional indemnity insurance covering all E.U member states, or some other comparable guarantee against liability arising from professional negligence, providing at least €1.000.000, for a single claim, and on aggregate, at least €1.500.000 per annum for all claims.
3. A CIF that provides one or more of the following investment services and/or performs the following investment activities:
- Dealing on own account;
- Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
- Placing of financial instruments without a firm commitment basis,
shall have an initial capital of at least €1.000.000
1.When applying for a license, a firm must provide, amongst other documents, a business plan, an operations manual (which should include the Anti-Money Laundering Procedures,) completed questionnaires from the members of the board, managers and shareholders.
2. The Board of Directors of the CIF shall consist of at least two executive members and two independent non-executive members. The majority of the members shall be Cyprus residents.
3. SERVICES: Please see the attached list for a list of investment and ancillary services for which you can apply for to obtain a license, along with a list of the financial instrument in relation to which the investment and ancillary services are exercised and contact us for any further information.
4. TIMING: Provided that you submit a duly completed application to the Cysec along with all supporting documents and the Cysec does not have any questions or does not need any clarifications your application will be examined within 6 months from submission of the application. Please note that in case the Cysec reverts with comments etc the 6 month period will start to run again from the time of submission of the additional documents/information etc.
5. STRUCTURE: As regards the structure I note that you can either set up a Cyprus company and apply in the name of the Cyprus company in which case you will obtain a license to operate a Cyprus Investment Firm or alternatively you can apply for a license to set up a branch in Cyprus in which case you will use the name of the company setting up the branch.
6. REQUIREMENTS: As regards the requirements of the Cysec, please note that it is not possible to provide you with an exhaustive list. However we note that you will need to set up a fully fletched office in Cyprus which will be duly staffed. Outsourcing is allowed to a degree, but some personnel are still required to be located in Cyprus. Therefore, a reasonable annual budget for the CIF’s operational expenses, including the salaries of employees as well as other operational expenses, (e.g. information technology, telephony, electricity, office rent, external and internal auditors, compliance, other professional fees, consumables, etc.,) but not including the salaries of their chief executive and financial officers, will be around €150.000 – €200.000 per annum.
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*Disclaimer: This information provided is purely as a courtesy and convenience. It is not intended to be constituted as legal advice.